Published Apr 19, 2024
This course explores international trade in goods and services, as well as the international exchange of financial assets. Economic theories will be examined, which help explain how international transactions affect the world's economies. Topics include the theory of comparative advantage and the gains from trade, tariff theory, concepts and measurement of balance of payments, exchange rate systems, and the international monetary system.
Prereq: ECON 101 or ECON 100/COMM 103; ECON 102
The main objective of this course is to introduce students to the critical economic issues that result from a country’s interaction with the rest of the world. That is, trade with other countries, international factor mobility, protectionism versus supranational economic integration, current account imbalances and exchange rate volatility just to name a few.
The course is divided into two parts: i) international trade and ii) international macroeconomics.
In the first part, we examine why countries trade, how international trade and factor mobility affect economies within and across countries in terms of production, employment, consumption, and welfare, and how trade policies can alter the gains from trade.
In the second part, we study the foreign exchange market, its main determinants, as well as macroeconomic policy under floating and fixed exchange rate regimes. We will also discuss the international flow of financial assets in the world economy.
| - Explain the patterns of trade and their determinants. |
| - Understand the distributional consequences of international trade in goods. |
| - Explain the consequences of trade policy: tariffs, quotas, etc. |
| - Understand exchange rates, their definitions, and main determinants. |
Weekly schedule | Topic and Chapters |
| Week 1 | Topic: Course Introduction & World Trade: An Overview Chapters 1 & 2 |
| Week 2 | Topic: Labor Productivity and Comparative Advantage: The Ricardian Model. Chapter 3 |
| Week 3 | Topic: Labor Productivity and Comparative Advantage: The Ricardian Model / Specific Factors and Income Distribution. Chapter: 3 & 4 |
| Week 4 | Topic: Specific Factors and Income Distribution / Resources and Trade: The H-O Model. Chapter: 4 & 5 |
| Week 5 | Topic: The H-O Model / The Standard Trade Model. Chapter: 5 & 6 |
| Week 6 | Topic: The Standard Trade Model. Chapter: 6 |
| Week 7 | Topic: The Standard Trade Model / External Economies of Scale and International Location of Production. Chapter: 6 & 7 |
| Week 8 | Topic: Firms in Global Economy: Export Decisions, Outsourcing and Multinational Enterprises. Chapter: 8 |
| Week 9 | Topic: The Instruments of Trade Policy / The Political Economy of Trade Policy. Chapter: 9 & 10 |
| Week 10 | Topic: Exchange Rates and Foreign Exchange Market: An Asset Approach. Chapter: 14 |
| Week 11 | Topic: Exchange Rates and Foreign Exchange Market: An Asset Approach / Money, Interest Rates and Exchange Rates. Chapter: 14 & 15 |
| Week 12 | Topic: Money, Interest Rates and Exchange Rates. Chapter: 15 |
Missing a Midterm Due to Illness During the Term
Missing a midterm will automatically result in a grade of zero for that midterm. If the illness can be documented with a UW Verification of Illness Form (the only acceptable document), with approval you may transfer the weight of the missed midterm to the final exam. This remedy is a privilege and not a right.
Students are advised to notify the instructor in person about the missed exam as soon as they can. Email notification and scanned VIF about the missed exam is acceptable.
Missing the Final Exam Due to Illness
Missing the final exam is a very serious matter which automatically results in a grade of zero for the final exam and possibly a failing grade for the course. Please carefully read the Economics Department policy on deferred final exams for instructions.
Deferred final exam policy | Economics (uwaterloo.ca)
No deferred final exam will be provided for students who missed all the exams (including the final exam) in this course.
It is the responsibility of students to ensure that they write exams in the location, date, and time assigned to their sections. Students writing exams in the wrong section are considered not writing exams at all and will receive a zero mark.
Students are responsible for administrative matters concerning their course registration including fee arrangements with the Registrar’s Office. No make-up work or other remedies will be given for loss of access to LEARN and academic consequences arising from administrative issues with the Registrar’s Office.
Krugman, R. Paul, Maurice Obstfeld & Marc J. Melitz: International Economics: Theory and Policy, 12thEdt., Pearson Wesley Publishers Limited, 2018.
To register for Introduction to International Economics:
1. Go to https://mlm.pearson.com/enrollment/kumase51486
2. Sign in with your Pearson student account or create your account. For Instructors creating a Student account, do not use your instructor credentials.
3. Select any available access option, if asked. » Enter a prepaid access code that came with your textbook or from the bookstore. » Buy instant access using a credit card or PayPal. » Select Get temporary access without payment.
4. Select Go to my course.
5. Select Introduction to International Economics from My Courses.
If you contact Pearson Support, give them the course ID: kumase51486
To sign in later:
1. Go to https://mlm.pearson.com
2. Sign in with the same Pearson account you used before.
3. Select Introduction to International Economics from My Courses.
| Component | Value |
|---|---|
| Midterms | 40% |
| Quizzes | 20% |
| Final Exam | 40% |
| Midterm 1 | Wed, June 05, 4:00pm - 5:20pm | 20% |
Midterm 2
Quiz 1 Quiz 2 Quiz 3 Quiz 4
| Wed, Jul 03, 4:00pm - 5:20pm
Monday May 27 - Sunday Feb 02 Monday Jun 10 - Sunday Jun 16 Monday Jul 01 - Sunday Jul 07 Monday Jul 22 - Sunday Jul 28
| 20%
5% 5% 5% 5%
|
| ||
| Final exam (comprehensive) | (TBD) | 40% |
No assignment screening will be used in this course.
All of us need a support system. The faculty and staff in Arts encourage students to seek out mental health support if they are needed.
On Campus
Due to COVID-19 and campus closures, services are available only online or by phone.
Off campus, 24/7
Full details can be found online on the Faculty of Arts website
Download UWaterloo and regional mental health resources (PDF)
Download the WatSafe app to your phone to quickly access mental health support information.
We acknowledge that we are living and working on the traditional territory of the Attawandaron (also known as Neutral), Anishinaabe and Haudenosaunee peoples. The University of Waterloo is situated on the Haldimand Tract, the land promised to the Six Nations that includes ten kilometres on each side of the Grand River.
For more information about the purpose of territorial acknowledgements, please see the CAUT Guide to Acknowledging Traditional Territory.
All deferred Final Exam requests for economics courses are administered by the Economics Undergraduate Office. Please consult the Deferred Exam Policy at
https://uwaterloo.ca/economics/undergraduate/resources-and-policies/deferred-final-exam-policy.
The University of Waterloo does not tolerate racism or any other form of discrimination and expects campus community members to contribute to a culture where all members feel safe and valued. Any member of the campus community who has experienced racism or discrimination at the University is encouraged to review available processes for addressing their concerns under Policy 33 – Ethical Behaviour and to seek guidance from the Equity Office via email at equity@uwaterloo.ca or through their website
Students applying for accommodation due to illness or extenuating circumstances should submit their documentation (verification of illness forms, narratives concerning circumstances) to the Arts Undergrad Office using the form available at
Accommodations for illness or extenuating circumstances | Arts (uwaterloo.ca)
Instructors have a VIF system window linked to Quest that lists students’ exemptions (including self-declared absences). Both the category of exemption granted, and the relevant dates appear in the system. This procedure is meant to protect student privacy. For further information on the process, see the page listed above.
Discretion regarding the form the accommodation takes rests with the course instructor. Guidelines are described in the course calendar,
Undergraduate Studies Calendar | University of Waterloo (uwaterloo.ca)
Academic integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
Grievance: A student who believes that a decision affecting some aspect of their university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70, Student Petitions and Grievances, Section 4. When in doubt, please be certain to contact the department’s administrative assistant who will provide further assistance.
Discipline: A student is expected to know what constitutes academic integrity to avoid committing an academic offence, and to take responsibility for their actions. [Check the Office of Academic Integrity for more information.] A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course instructor, academic advisor, or the undergraduate associate dean. For information on categories of offences and types of penalties, students should refer to Policy 71, Student Discipline. For typical penalties, check Guidelines for the Assessment of Penalties.
Appeals: A decision made or penalty imposed under Policy 70, Student Petitions and Grievances (other than a petition) or Policy 71, Student Discipline may be appealed if there is a ground. A student who believes they have a ground for an appeal should refer to Policy 72, Student Appeals.
Note for students with disabilities: AccessAbility Services, located in Needles Hall, Room 1401, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with AccessAbility Services at the beginning of each academic term.
Turnitin.com: Text matching software (Turnitin®) may be used to screen assignments in this course. Turnitin® is used to verify that all materials and sources in assignments are documented. Students' submissions are stored on a U.S. server, therefore students must be given an alternative (e.g., scaffolded assignment or annotated bibliography), if they are concerned about their privacy and/or security. Students will be given due notice, in the first week of the term and/or at the time assignment details are provided, about arrangements and alternatives for the use of Turnitin in this course.
It is the responsibility of the student to notify the instructor if they, in the first week of term or at the time assignment details are provided, wish to submit alternate assignment.